The idea that the Post Office should be given the exclusive right to deliver smaller parcels could distort the market and threaten jobs, Tynwald heard.

A report by Tynwald’s economic policy review committee on the Post Office post Covid-19 recommends reform to exclude private firms from delivering packets and parcels under 1kg in weight.

In a general debate on the report, Tynwald heard that the Post Office was seeing a decline in letters and growth in its parcel business - a trend that had accelerated during the Covid lockdown.

Under a 1993 Act, the Post Office has the exclusive right to convey letters. The scrutiny committee suggests reforming this ’outdated’ legislation, and give the Post Office exclusive right to deliver packets and parcels of less than 1kg.

It says this will bring in extra revenue while also dealing with the ’gig economy’, with couriers working for private sector firms on zero hours contracts and with little in the way of employment protection.

Committee chairman Chris Robertshaw said: ’We have to make a decision. Do we want a first-class postmen and post women service or do we want to drive down to the bottom? It’s our decision.’

But Middle MHK Bill Shimmins said: ’I am concerned about distorting the market by restricting competition. This might appear initially attractive but potentially has considerable negative consequences.

’Introducing an artificial regulation so that only the Post Office can deliver small parcels feels an extraordinary step which I struggle to support especially when Post Office parcel volumes are booming.’

Mr Shimmins said businesses must adapt to meet changing demand.

But he said the committee had not met with the private sector parcel operators.

Mr Shimmins added: ’I would urge extreme caution when looking to expand the public sector in times of significant economic challenge.’

Lawrie Hooper (Ramsey) said the proposals on exclusive privilege could threaten the viability of private sector firms and threat a large number of jobs.

’There’s hasn’t been any evidence taken from anyone on these points other than the Post Office,’ he said, adding that it could have a profound impact on the island.

Mr Robertshaw said the committee and Tynwald members had received a series of letter from private sector couriers.

He said: ’Tynwald needs to make its mind up.

’We say we encourage the living wage but some of the sector who wrote in boasted that they were paying the minimum wage and some are on zero hours.

’If you really want to push the postmen and women out into an over-competitive current private sector market then they must compete if the Post Office is not to lose money.’

He said Amazon may decide it wants its own service and ’sweep everything else aside’, said Mr Robertshaw.